Orders for U.S. durable goods fell less than forecast in November, easing concern that business investment would plummet in coming months in response to the deepening credit freeze and slowing sales. Bookings for goods meant to last several years fell 1 percent, after a 8.4 percent drop in October that was more than previously estimated and the biggest decline in eight years, the Commerce Department said today in Washington. Excluding transportation gear, orders unexpectedly rose. Demand for computers, machinery and defense equipment rebounded last month, partly offsetting a slump in aircraft bookings. Even so, companies will likely keep paring spending as consumer bookings slow and international demand weakens in the face of the global credit crisis. ``Orders were so down in the previous months that there's probably a little payback for that,'' Robert Stein, senior economist at First Trust Advisors in Lisle, Illinois, said before the report. ``Businesses have to reduce their inventories now. So we will see continued downward pressure on business output.'' Another Commerce report showed consumer spending adjusted for inflation rose 0.6 percent in November, the biggest increase in two years. Economists projected durables orders would fall 3 percent, according to the median forecast in a Bloomberg News survey. Excluding demand for transportation equipment, bookings rose 1.2 percent, the first increase in four months. The median estimate projected a 3 percent decline, according to the Bloomberg survey. Growth Impact Bookings for non-defense capital goods excluding aircraft, a measure of future business investment, increased 4.7 percent, the most since September 2006, after a 6.6 percent slump in October. Shipments of those items, used in calculating gross domestic product, rose 0.2 percent. Kemet Corp., the maker of circuits for electronics manufacturers, said Dec. 22 it will eliminate 1,500 factory jobs and sales for the quarter ending Dec. 31 will decline more than it previously predicted. Orders of transportation equipment dropped 7.4 percent, led by a 38 percent drop in demand for commercial aircraft. Boeing Co. booked 7 orders in November, down from 14 in October, the company said on Dec. 4. A strike by 27,000 machinists at the Chicago-based company may have hurt output and sales. The walkout ended Nov. 2. Auto sales figures released earlier this month showed cars and light trucks sold at a 10.2 million annual pace in November, the slowest rate since October 1982. Auto Bailout President George W. Bush, on Dec. 19, said the government will extend $13.4 billion in emergency loans to General Motors Corp. and Chrysler LLC in exchange for the companies substantially restructuring their businesses. Both companies had said they were only weeks away from insolvency without an infusion of cash. They have until March 31 to meet the requirements established for the loan. Orders for computers climbed 12 percent, while demand for machinery increased 4.1 percent after a 11 percent drop. National and regional reports indicate bookings may continue to drop, suggesting companies across the country are having difficulty securing financing for big purchases and that consumer demand is waning. The Institute for Supply Management's manufacturing index dropped to the lowest level in 26 years in November and its new orders gauge was the least since 1980. Reports for this month suggest continued weakness. The New York Fed's general economic index fell to a record low. Less Dire Today's report, combined with the figures on consumer spending, may lead some economists to raise forecasts for growth in the fourth quarter. Final figures on third-quarter gross domestic product from the Commerce Department yesterday showed the economy contracted at a 0.5 percent annual rate, the most since the 2001 recession. The economy entered a recession in December 2007, the National Bureau of Economic Research announced Dec. 1. Economists surveyed by Bloomberg earlier this month projected GDP this quarter would shrink 4.3 percent, the biggest contraction since 1982, and would remain negative through the first half of 2009. The global economic slowdown is hurting large manufacturers. Caterpillar Inc., the biggest maker of construction equipment, said Dec. 22 it will cut executive pay as much as 50 percent and suspend merit increases for management and support staff in order to trim costs. The company is offering voluntary buyouts to U.S.- based employees through Jan. 12 and will continue to close plants temporarily and cut jobs.

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